The financial services sector needs a fresh regulatory and tax approach to deal with the challenges and opportunities presented by a rapidly changing technological landscape, according to a new report by the Confederation of British Industry (CBI).

The report is a result of conversations with financial services firms across the UK, stating that while firms have welcomed the government’s support for FinTech developments such as the regulatory sandbox, they need regulations that are fit-for-purpose in a new technological age.

Among other proposals, the UK’s largest business group called for:

• New mechanisms, such as a new Treasury Select Committee sub-committee for financial services, to scrutinise regulations and taxes that put customers first.

• Strengthening engagement with the Financial Stability Board and more international regulatory coherence to support investment and innovation.

• A cross-sector financial services technology hub, supported by the Treasury and Financial Conduct Authority, to share best practice, knowledge and latest technologies.

Flora Hamilton, the CBI’s head of financial services, said: “The financial services sector is one of the cornerstones of the UK’s economy – when it is firing on all cylinders, everyone benefits.

“But the challenges and opportunities presented by the rapid pace, and tremendous scale, of technological change come in equal measures for financial services firms,” she continued. “To fully embrace this change, firms are clear that they need the right regulatory and tax framework in which to operate, so they can innovate and grow.”

The CBI argued that customers must be at the heart of regulatory changes, ensuring the UK works hand in hand with the global financial services industry to stay at the forefront of international regulatory and taxation policy.

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